Britain's leading index ended yesterday in negative territory on the back of gloomy economic forecasts and weak energy stocks.

Despite soaring mining shares, the FTSE 100 closed down 111.88 points or 2.6% at 4234.05 after the World Bank said that the global economy would contract by 2.9% in 2009. The Organisation for Economic Cooperation and Development added to the mounting pile of gloomy sentiments when it said it sees a "very difficult" 2009, with negative growth in its member countries.

The index has fallen 4.2% this month, reversing three months of consecutive monthly gains since the six-year low reached in March.

Weak energy stocks dragged the FTSE lower. With the price of crude dropping below $67 a barrel, shares in BG Group closed down 65p or 6.1% at £10.01 and Royal Dutch Shell was down 75p or 4.7% at £15.20.

The biggest gainer in the FTSE 100 was Anglo American, which closed up 75p or 4.6% at £16.98 on reports that Xstrata is seeking a £41bn merger with the mining company. Xstrata's advances were dismissed by Anglo American yesterday evening.

The biggest loser was British Airways, with shares closing down 11.8p or 8.65% at 124.47p after Sir Richard Branson said at the weekend that the airline is "not worth much any more". The co-owner of Virgin Atlantic warned ministers against stepping in to save the loss-making airline.

By far the biggest loser in the FTSE 250 was Independent News & Media (INM), which ended down 0.06p or 18.75% at 0.26p after it announced that it was considering a "deeply discounted" rights issue in order to repay some of its €200m bond.

"As part of these discussions, the company has put forward a comprehensive refinancing proposal – while not yet agreed by any stakeholder – which will require all stakeholders making some necessary material concessions in order to achieve significant deleveraging for INM," INM said in a statement to the Irish stock exchange yesterday.

"One element of this proposal involves INM seeking to raise some capital, subject to shareholder approval, by way of a deeply discounted rights offering in order to partly repay the bonds."

Yell also ended yesterday in negative territory after the classified ­directories group said in its annual report that it may need to reset its financial covenants because of increasingly uncertain ­trading conditions. It closed down 4p or 13.6% at 26p.